As a boy, Brit Vitalius, 39, a Portland real estate broker, remembers seeing boarded-up houses on the Eastern Promenade while his father pointed out the spectacular views of Casco Bay.

It was an odd juxtaposition, even for a child who didn’t know anything about real estate. But Munjoy Hill in the 1980s had been on a downward slide for decades. Once a respectable working-class stronghold, it had become the kind of shabby neighborhood where visitors were told to be careful walking alone at night.

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Daniel Haley Jr., a lifelong resident of Munjoy Hill, bought his current home on the Eastern Promenade in 1995. The Hill developed a “rough reputation” in the ’70s and ’80s, he said. Photos by Gabe Souza/Staff Photographer

Rosemont Market & Bakery and Hilltop Coffee Shop on Congress Street have become popular spots among Munjoy Hill locals.

For years, people have predicted that the Hill would see the same gentrification that transformed the West End 30 years ago. For years, those predictions have been dismissed as wishful thinking.

No more. The Hill’s turn has come, and the area is now the most desirable real estate in Maine, says Vitalius, who specializes in multi-family buildings.

“Anything on the Hill is hot right now,” he says. “Every building that sells gets fixed up, and most were pretty run down.”

The Hill’s revival began more than a decade ago — interrupted briefly by the collapse of the real estate market during the Great Recession — and has picked up again as if the collapse never happened.

Real estate sales tracked by the Multiple Listing Service, a database for Realtors to share information about properties, tell the story.

Over the last five years, two of the three most expensive residential properties sold in the city have been on the Hill: a $1.5 million sale in 2007 of a two-family home at 176 Eastern Promenade, and a $1.4 million sale in 2009 at 114 Eastern Promenade.

Both of those homes cost more than $525 per square foot. While a much larger mansion on the West End sold for more money, properties on Munjoy Hill now command the highest residential prices in the city on a per-square-foot basis, says John Hatcher, owner of the Hatcher Group of Keller Williams Realty.

Since 2010, the average price of three-unit buildings on the Hill over the last two years jumped from $316,000 to $365,000, a 16 percent increase.

While sale prices haven’t climbed back to their 2008 peak of $450,000, the Hill’s real estate market has been healthier than in the rest of Cumberland County, which has seen no growth since 2009.

Rents on the Hill also have increased, says Crandall Toothaker, one of the city’s biggest landlords.

One-bedroom apartments that leased for $700 to $750 per month a decade ago now go for $1,000, including utilities, he says. Two-bedrooms can fetch between $1,100 and $1,800.

A decade ago, most of the prospective tenants moving to Portland wanted to live in the West End, he says.

“Now we see a complete change,” Toothaker says. “Now they say, ‘What do you have available on the East End?’ “

Toothaker himself has joined the trend, undertaking a major renovation of a house he bought 18 months ago on the Eastern Promenade near Fort Allen Park.

The arrival 13 years ago of the St. Lawrence Arts Center on Congress Street, and later Rosemont Market & Bakery, the Hilltop Coffee Shop and several restaurants like Blue Spoon, Bar Lola and The Front Room, have added to the Hill’s appeal, say real estate brokers and residents.

The Hill is now the hip place to be because it offers an easy walk to downtown, water views and a strong sense of community, says Rita Yarnold, who grew up on the Hill and now owns Bay Realty Associates.

“It’s nice to see the Hill come back because I watched the decline,” she says. “It does my heart good to see the change.”

Many of the recent buyers are older couples with adult children, brokers say. They have enough cash to out-bid younger buyers and then completely rehabilitate their new homes.

Some of those new buyers are moving to the Hill from the West End. Cyrus and Patricia Hagge moved from a stately brick home on Bowdoin Street to Turner Street, where they built a two-family house on an empty lot.

Their house is one of 10 new single-family and multi-unit houses built in recent years, not including the 16 affordable units being built by Avesta Housing on the former Adams School site.

Cyrus Hagge, 60, a retired general contractor, says the neighborhood is friendlier and livelier than his old West End neighborhood.

He says the staff at Blue Spoon and other local businesses know him by name, and neighbors have stopped him in the street to ask about his recent shoulder surgery.

“It really feels like a big family,” he says.

Unlike the West End, whose brick homes were originally built for the city’s merchants and professional class, Munjoy Hill was developed for working-class families, many of them Italian, Irish, Scandinavian and Jewish immigrants. They worked on the nearby docks, the Grant Trunk Railroad or at the Portland Company complex, which built locomotives for the railroad, says State Historian Earle Shettleworth.

Most of the Hill was developed between the Civil War and 1900, he says. Predominantly triple-decker homes, the Hill’s primarily wooden housing stock is typical of other industrial New England cities, such as Lowell, Lawrence and Worcester, Mass., he says.

The preservation of the Eastern Promenade from development in the early 1900s attracted affluent families who built Victorian homes overlooking Casco Bay.

Daniel Haley Jr., 66, grew up in one of those homes. He says the Hill was dominated by large extended families when he was a child. Those families produced enough children to fill a Catholic elementary school, four public elementary schools and a junior high school. All of the schools have since been closed.

The junior high school is now the site of the East End Community School, the only school left on the Hill.

The Hill’s decline began in the 1960s when families were lured to the suburbs, Haley says. Many of the large apartments were cut up into smaller, cheaper apartments.

By the 1970s and 1980s, drugs were being sold on the street, and the Hill developed a “rough reputation,” worse than it really deserved, Haley says.

The gentrification of the Hill has been slow and subtle.

Mean household incomes increased significantly between 2000 and 2011, particularly on the south side of Congress Street, where they grew from $37,000 to more than $55,000, according to U.S. Census data.

However, a few extremely high values — such as the arrival of several wealthy families — can throw off the average, creating the impression that most people on the Hill are better off than they actually are.

Median income north of Congress Street actually fell, from $31,172 to $31,064, according to a Census estimate. Median incomes south of Congress Street increased from $35,464 to $37,060.

The data indicate a lot of rich and poor households on the Hill, but not many middle-class families, says Jeff Levine, director of the city’s Planning and Urban Development Department.

Nearly three-quarters of the Hill’s 4,700 residents are renters, according to the Census.

For many residents, the cost of housing has become a greater burden over the past decade, Levine says.

Allowing neighborhoods to deteriorate so rents stay cheap, though, is not a good way to provide affordable housing, he says.

A better way, he says, is to support initiatives like the Avesta Housing project at the former Adams School site, and to implement zoning rules that allow developers to build denser developments if they also provide some affordable units.

The $5.5 million Avesta Housing project will create 16 condominium units available to families whose household incomes are no more than 120 percent of the area’s median income. About $1.7 million in federal stimulus money is being used to lower the price of the units below the cost to build them. The units are expected to sell for between $225,000 and $275,000.

Still, the project is small, and the monthly mortgage payments will be too high for a lot of people.

For many low-income residents, the solution is to leave Munjoy Hill.

Katey McKeever, 24, a cashier at Colucci’s Hilltop Market, moved from the West End to Washington Avenue last year to be closer to work. She’s splitting her $1,050 monthly rent with a roommate, but her bedroom is the size of a walk-in closet.

“I’m moving back to the West End,” she says. “There is no way I can afford it here.”

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